The Florida Insurance Program (FIP)

The Insurance Solution For Florida Owner/Operators

Mission:

Increased Long-Term Insurance Price/Cost Stability in Florida

Solution:

Property – Layered Insurance Program Through Lloyds of London and Others

Goals and Opportunities:

In 2013 premiums were again rising dramatically (100%+) and for the first time a layered Property solution was setup using multiple companies each taking a portion of the risk from large catastrophic events and more.  This concept created diversification in the Florida system while also making it easier to negotiate future pricing.  It also allowed us to simply replace individual partner company with the goal of keeping the pricing as low as possible.  This approach and policy contain Florida based Owner/Operators only.  This means that events outside Florida should not affect Florida Owner/Operators pricing as much as prior.

Summary:

This strategic option is available to all Florida based Owner/Operators.  Most Florida Owner/Operators have been united together on insurance and safety to stabilize long-term insurance prices in Florida.

History and Risks:

The concept of a loss limit program with insurance markets sharing in the risk was architected in 2008 by Besnard/Amwins.  There was no premium or capacity issues in Florida, so it was reviewed each year as to see if a long-term solution made sense.  In 2012, the market started changing, but only a few Owner/Operators in Florida had to go outside the approved system and it was allowed by Corp. while still allowing the use of the Umbrella.  These Owner/Operators paid more than double others that year.  By the following year, Hurricane Sandy hit the New York area (2012) and then the Owner/Operators Florida Insurance Program was established/launched.  The only option for Florida in 2013 was Scottsdale and they were giving a 110% increase.  By the O/O’s uniting and through Corp. support, the Florida Insurance Program (FIP) saved the owner/operators 50% in the 1st year.  The program was then tested with 3 of the top 5 hurricanes hitting Florida.  Last year, 2023, was its greatest test.  With hurricane Ian hitting in 2022, other approved insurers left Florida once again and the next best option outside of FIP for many O/O’s was $500,000+ in costs.  At that premium, many restaurants would not be able to operate which represents to the system around 3 Billion in Sales.  Rather, with Florida Owner/Operators united, the system had a major success with shareholders, owner/operators, and their suppliers in Florida having one of their best years.  The #1 risk to FIP is a broker / market coming into Florida with a short-term, untested offering.  If an O/O leaves for such an offer, the premium rises for all others until eventually the economy of scale of the 40+ markets that have shared in the risk is gone.  At this point, everyone will pay more and once the next storm hits, dramatic premiums will be assumed by the system and consumers, and like in the past some will not be able to find coverage and may have to go unapproved.  We have many real data points for this all by reviewing past quotes for such programs before/after Hurricane Ian.

Next Steps

In 2024, we will have conversations to determine as to what coverages are valued, premiums, services, and the renewal process long-term as to keep the group together and a stronger Florida.  We want your feedback and help.  As you now know, we are limited on our ability to communicate with you, so please reach out anytime with your thoughts too.

When founded in 2013, everyone had the program’s goal as more stable Florida insurance premiums long-term.  However, in recent years different needs seem to exist among various Owner/Operators.  Some just want the program to be cheaper than others every year; however, in 2023 they would have paid way more!  If selling in the next 12 months, the Owner/Operators might want the lowest 1-year cost not the best long-term and not value coverage.  Finally, some are still good with the original mission of long-term premium stability vs. being best priced every year.

We are striving for continuous improvement and want your input to make this solution be more transparent and smoother.

Competition to the Owner/Operators Florida Insurance Program (FIP)

It is unfortunate that others are told to come into Florida and even supported in order to try and break up what Owner/Operators have created.  This program sees some competition every few years.  This usually happens a year or two after a major Hurricane hits Florida like Hurricane Ian most recently.  Those others had no hurricane claims since they did not insure Florida in their time of need or in the year after.  This makes it so they can be cheaper for a year or two before they must leave the State and can’t help Floridian’s again.  The FIP program is set up to be able to navigate this and give Owner/Operators a reasonable/affordable option to stay united even in those years.

FAQ – What others have written about the FIP.

Others want to “help build a vibrant insurance marketplace for Florida”.  – If you live and run a business in Florida, you know how companies come and go all the time making such promises.  This just happened in 2023 when the exact company who is making this statement left the State.  

Others claim “we know that Florida franchisees have had limited insurance options for many years.  This does not seem right to us, so we are trying to provide Florida franchisees with options.”  – Florida Owner/Operators setup the Florida Insurance Program 12 years ago to combat this very issue.  With 40+ markets sharing in the property risk, it has kept the increase over 12 year to <30%.  That is <3% per year.  Long-term property premium stability has been the goal and it has been achieved with proven results.

Others claim “we are committed to being a long-term player in the Florida insurance marketplace”  – The last time they were here, they were gone within 2 years leaving all scrambling to get back into the Florida Insurance Program.  By everyone not united in 2022, this contributed to everyone having to pay the highest rates ever seen in 2023.

Others claim “we do not have any Florida capacity constraints. We can write as many Florida Operators that will partner with us.”  – FIP has proven this when in 2023 it had all except 2 Florida Owner/Operators (10 restaurants) insured leveraging the strength of it’s 40+ insurance markets sharing in the risk.